- USD/MXN remains sideways, after failing at 20.15, looking at 19.95.
- The dollar loses strength in the market after speculation about the Fed.
USD/MXN went from trading at 20.14 to plummet to 19.97, the lowest in three days. This occurred in the face of a general weakening of the dollar due to speculation about the next steps of the Federal Reserve.
A story in the Wall Street Journal pointed to a 75 basis point hike at the November 1-2 meeting being ready. The novelty is that the pace of future rises could be discussed in it, given the concerns of some members about the economy. Other members still have high inflation as their main problem.
This pushed down Treasury yields and weakened the dollar throughout the market, as well as boosting stocks on Wall Street. This was beneficial for the Mexican peso.
The USD/MXN is approaching the bottom of the range of the last three weeks, in which it remained between 19.95 and 20.15. There is an important barrier between 20.15 and 20.20, which if left behind would leave room for more raises.
For these hours, the predominant risk seems bearish and to break below 19.95, the next support is seen at 19.80, which is a critical level, which should favor a rebound, at least temporary if it is reached.
Technical levels
Source: Fx Street
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